Goldman Sachs released a research report stating that it slightly raised the target price of Hisense Home Appliances (00921) H shares by 3.3%, from HK$30 to HK$31, and raised the 2024-2026 earnings forecast per share by 2%, maintaining a “buy” rating. The company's performance in the first quarter of 2024 was better than expected, revenue growth accelerated, and recurring profit growth was strong. Total revenue and net profit for the period were 23.486 billion yuan and 981 million yuan respectively, up 21% and 59%, both higher than Goldman Sachs's forecast.
Goldman Sachs believes that compared to last year, the company's management is still confident that it will achieve its annual growth goals, outperform its peers, and continue to improve efficiency. However, the gross margin of split air conditioners for the rest of 2024 seems to be gradually conservative, mainly due to rising copper and aluminum prices, which affect the increase in costs.
On April 24, the company's management emphasized three key topics: recovery in domestic demand, prospects for overseas growth, and profit prospects. Management is neutral on the overall domestic demand trend. The company will focus mainly on high-end products to improve the product portfolio; overseas growth will slow down as the base gradually rises; profit margin improvements will continue for the rest of 2024, but it may narrow down due to rising sales costs. Management also anticipates that Nippon Sanden, which was acquired by the company, will achieve balance of payments throughout 2024 and provide a more meaningful profit contribution in 2025.